Bill
HB 2663
Imposes a new state tax of 5.64% of gross receipts on platform-facilitated short-term rentals, collected by hosting platforms, and requires operator licensing.
Status & timing
- Introduced by Rep. Marcus C. Evans, Jr. (IL) as the Short‑Term Rental Occupation Tax Act.
- The bill text states it becomes effective January 1, 2026.
- (Legislative history in the supplied file includes committee and floor actions; this summary focuses on the Act’s substantive provisions.)
Purpose
- To impose a new state occupation tax on short‑term rental transactions facilitated by online hosting platforms, create licensing requirements for short‑term rental operators, and make conforming changes to existing hotel and local tax/code provisions.
Key provisions
- Tax base and rates
- Two taxes are imposed on each hosting platform that facilitates a short‑term rental transaction:
- A tax equal to 5% of 94% of the gross rental receipts from the transaction.
- An additional tax equal to 1% of 94% of the gross rental receipts from the transaction.
- Effective percentages: 5% of 94% ≈ 4.70% of gross receipts; 1% of 94% ≈ 0.94% of gross receipts. Combined ≈ 5.64% of gross receipts.
- Who must collect/remit
- The tax is imposed on the hosting platform that facilitates the booking (platforms that advertise, accept reservations, or collect/process payments).
- The bill allows platforms to separately state and collect an amount that reimburses the platform for its tax liability.
- Definitions
- “Hosting platform” (or “platform”): a person/entity providing an online application, software, website or system through which a short‑term rental is advertised or booked.
- “Short‑term rental”: a dwelling (apartment, house, condo, etc.) with any room rented for less than 30 consecutive days and reserved in advance (with several exclusions — see below).
- Other statutory terms: occupancy, operator, rent, room, permanent resident, booking transaction.
- Licensing and administrative
- Operators of short‑term rentals must obtain a business license from the Department of Revenue.
- The Department is given administrative responsibilities (registration/licensing, collection and enforcement implied by the statute).
- Exemptions & limitations
- Exempts transactions by religious or charitable entities that hold the Department’s exemption ID and where the rental furthers the entity’s purposes.
- Does not apply where federal constitutional or treaty limits prohibit state taxation or reimbursement from customers.
- Prohibits use of funds received under the Act to advertise or otherwise promote new competition in the hotel industry.
- Conforming changes
- Amends the Hotel Operators' Occupation Tax Act to require certain re‑renters to collect/remit and makes conforming amendments to the Counties Code and Illinois Municipal Code.
Who is affected
- Hosting platforms (primary taxpayer/collector): online marketplace operators that facilitate short‑term rentals in the state.
- Short‑term rental operators/hosts: new licensing requirement; potential pass‑through of tax to guests.
- Guests/occupants: may see a separately stated charge that reimburses the platform’s tax liability.
- Hotels and local governments: subject to conforming changes in other occupation tax laws and local codes.
Notable practical effects
- Creates a state revenue source tied specifically to platform‑facilitated short‑term rentals.
- Shifts collection responsibility to hosting platforms and places a licensing requirement on operators.
- Places limitations on how tax proceeds may be used (no promotion of hotel competition).
(For implementation details — registration procedures, remittance schedules, audit and enforcement provisions, and exact interaction with local taxes — consult the final enrolled text and Department of Revenue rules when issued.)
Compiled from official sources — confirm details with the bill’s official record.
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